Public R&D Subsidies, Outside Private Support, and Employment Growth
AbstractIn the aftermath of the passage of the American Recovery and Reinvestment Act of 2009, the employment effects of public subsidies have been scrutinized because of new emphasis on public accountability and transparency. In this paper we investigate conditions in which public subsidies of research and development (R&D) in small firms stimulate employment growth. We find, based on an empirical analysis of employment growth induced by U.S. Department of Defense Small Business Innovation Research (SBIR) program awards, that the stimulated employment growth is greater under two conditions: one, the presence of outside investors providing additional funding for the R&D, and two, when an exceptional amount of intellectual property is created by the publicly subsidized R&D. In addition to outside investors, other firms that make commercial agreements with the subsidized firm appear important for the employment growth of the subsidized firm. Cooperation between the small business doing the R&D and other firms is an important determinant of the commercial success of the technologies created with the support of public funds.
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Bibliographic InfoPaper provided by University of North Carolina at Greensboro, Department of Economics in its series Working Papers with number 13-1.
Length: 24 pages
Date of creation: 22 Feb 2013
Date of revision:
Public subsidy of R&D; Intellectual property; Employment growth; Entrepreneurship; Cooperation;
Find related papers by JEL classification:
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-09 (All new papers)
- NEP-CDM-2013-03-09 (Collective Decision-Making)
- NEP-CSE-2013-03-09 (Economics of Strategic Management)
- NEP-ENT-2013-03-09 (Entrepreneurship)
- NEP-INO-2013-03-09 (Innovation)
- NEP-IPR-2013-03-09 (Intellectual Property Rights)
- NEP-SBM-2013-03-09 (Small Business Management)
- NEP-TID-2013-03-09 (Technology & Industrial Dynamics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- José Ángel Zúñiga-Vicente & César Alonso-Borrego & Francisco J. Forcadell & José I. Galán, 2014.
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Books from Upjohn Press,
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- Albert N. Link & John T. Scott, 2012. "Employment growth from public support of innovation in small firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(7), pages 655-678, October.
- Link, Albert N. & Scott, John T., 2011. "Employment Growth from Public Support of Innovation in Small Firms," Working Papers 11-17, University of North Carolina at Greensboro, Department of Economics.
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